NEW DELHI: Analjit Singh’s Max India Ltd Monday said it would offer an exit opportunity to public shareholders as the company plans to enter new businesses after selling its hospitals and health insurance arms.
Max India is currently in the midst of selling a 51% stake in its health insurance joint venture, Max Bupa, to private equity firm True North. The process is likely to be completed in the next six months.
Max India is also preparing to demerge into two listed entities. The first entity will be created by the merger of Max Healthcare Institute Ltd with the KKR-backed hospital operator Radiant Life Care Pvt. Ltd. The combined entity will be India’s third largest corporate hospital chain, with more than 3,200 beds and 16 hospitals and will be listed on the stock exchanges.
Radiant Life Care agreed to buy a majority stake in Max Healthcare from Max India on 24 December.
According to the company’s statement on Monday, Max India’s other demerged entity named Advaita will own the group’s retirement homes business, Antara Senior Living. It will also manage a corpus of over ₹500 crore received from the sale of Max Bupa.
Advaita has proposed to utilize its cash reserves to offer an exit opportunity to uninterested shareholders through a capital reduction process, subject to regulatory approvals.
“This will allow such shareholders access to proportionate proceeds from Max Bupa divestment and encash their shareholding,” the company said.
Currently, the promoter group holds a 40.9% stake in Max India, while public shareholders own 59.07%.
The new businesses that the group plans to enter will be decided next year and will be complementary to the group’s focus areas including life insurance, real estate, senior care and lifestyle, said the company.
“Our aim is to recreate the Max India story all over again by seeding high-potential businesses and doing them the Max way, which will likely create significant value for those who stay invested with us,” said Analjit Singh, founder and chairman of Max Group. “I remain committed to grow Max India and retain my shares in the company.”
According to Mohit Talwar, vice chairman of Max Group and managing director of Max India, the business portfolio rebalancing will provide fresh impetus to growth and returns.
“Our choice of businesses and smart capital management has resulted in a 23% IRR (internal rate of return) for Max India investors since we went public. This, even when our stock prices are unusually depressed currently,” he said.
Max India is the holding company of Max Bupa Health Insurance and Antara Senior Living and the equal joint venture partner in Max Healthcare. Max Healthcare and Max Bupa Health Insurance are joint ventures with Life Healthcare (South Africa) and Bupa Finance Plc (UK), respectively.